Picture a typical day at work. Does this day consist of competing with fellow advisors and the frustration of you continuing to vie for the same client, who is often a married white male professional? This is believed to be the demographic that many agents consider to be the ideal prospect. This is the market that they know, that they’re comfortable with, and that they try to sell to.
But while you’re trying to sell to this saturated market, there is a large, underserved market with tremendous sales opportunities waiting.
The new ideal client
The multicultural population has been exploding in the United States. In fact, the latest census report, released last October, found that America’s minority population — particularly Hispanics, blacks, and Asians — now accounts for one-third of the country’s 300 million people.
The Asian-American population, in particular, has risen to more than 14 million, and between 1990 and 2000 it grew by 72 percent, far outpacing the U.S. total population growth of 13 percent. Additionally, this is an affluent and well-educated market. The U.S. Census Bureau indicates that 44 percent of Asian-Americans hold a bachelor’s degree, compared with 25 percent of the total population, and that 22 percent of Asian-American households have an annual income of $100,000 or more, compared with 14 percent of all households.
Where to start?
You’re probably thinking that this market sounds attractive in terms of potential sales opportunities, but you may feel somewhat out of your element when you begin to sell to this market. As with any new market, entering it takes time and effort and it must be looked at for its long-term potential.
First, it’s important for agents to realize that although this market is referred to as a group under the umbrella term of Asian-Americans, they are a diverse demographic that belongs to one of six ethnic groups. The largest segment among the various Asian-American groups, however, is Chinese-Americans, who boast a total population of 2.9 million people.
Before agents begin to approach this market, they’ll want to do their homework. For example, it’s important to learn what’s valuable to this market, as well as the goals and fears of the people who make it up.
Existing research can help agents answer some of these questions. In terms of Chinese-Americans, we know this is a market that is extremely concerned about finances and very savings oriented. With this information, agents may consider the opportunity to sell an accumulation product such as an annuity or a life insurance policy that focuses on cash value growth. Additionally, Chinese-Americans are even more concerned than the general population about dying prematurely without adequately providing for their dependents. This concern is heightened by the tendency of this market to live with larger families, which could include both children and older relatives. This gives agents the perfect opportunity to present life insurance as a viable solution to ensuring their families are financially provided for during a time of loss.
This focus on providing for family also translates into providing for aging parents and funding their children’s education — again, financial concerns that can be assuaged by insurance products ranging from permanent life insurance to annuities.
Linguistic logistics
Think about the times when you have the option of selecting what language you would like to receive information, such as at a bank ATM machine or on an automated phone call. Naturally, even if you have the ability to speak another language, you will typically choose your primary language.
Asian-Americans are no different in preferring to use their primary languages. According to LIMRA International, most Chinese-Americans speak a Chinese dialect when they are in their homes and, even among those who rate their ability to speak English “very well,” many Chinese-Americans prefer to receive their information in their primary language.
Because of this, one of the most fundamental ways to begin connecting with this market is to provide information in brochures, marketing materials, business cards, and Web sites in the Chinese language.
Strategic partnerships
Advisors should consider finding a Chinese-speaking advisor to partner with, as this market typically prefers to work with producers who share a similar culture, especially those who are not fluent in English.
Also, in order to correctly deliver information, an advisor may find it useful to partner with a strategic carrier who is well respected by multicultural producers and customers alike.
Marketing solutions, materials, and products
For Chinese-Americans, cultural sensitivity in marketing materials is the key. The messages conveyed by your marketing materials — both verbal and nonverbal — should resonate with these groups and reflect their cultural heritages. For example, as mentioned above, this ethnic group has concerns about dying prematurely without adequate coverage for dependents. Therefore, marketing messages should emphasize how insurance products can provide financial security to themselves and their families. However, materials must present this information in a culturally sensitive way.
The overall goal of all marketing collateral should be to consistently educate the Chinese-American population about the importance of the products you’re trying to sell and how they can help these prospects meet their financial needs. In addition, marketing efforts should steer this group toward additional resources that allow them to conduct further research, as they may not currently own life insurance simply because they don’t have much knowledge about it.
Making the sale
Once you’ve prepped for the sale, it’s time to actually make it happen.
First, make the sale in person.
LIMRA states that almost 8 in 10 Chinese-American households obtained their individual life insurance policies from a life insurance agent or broker and that other distribution channels were rarely used. This implies that this market is particularly receptive to a personal, face-to-face approach to purchasing insurance, and that these prospects are unlikely to purchase your product unless they are personally contacted.
Also, keep in mind the importance of providing superior service every time to every client. Making a good impression on one client may lead to more business simply through referrals. Chinese-Americans find word-of-mouth recommendations very important, and many expect to find a financial service representative who is recommended by family and friends.
In fact, according to Jimmy Chen, sales manager of One Financial/Alliance Financial Consultants Inc., “close to 100 percent of [our] business comes from referrals. In the Chinese market, there is no cold calling. Potential customers must get to know you first, and referrals are one way of doing this.”
The Asian-American market, and specifically Chinese-Americans, is primed for insurance-based financial solutions. Their financial concerns make them an attractive market for accumulation, and protection products in particular. As the Chinese-American population continues to grow, independent advisors would do well to keep these prospects in mind when seeking new clientele to help expand their business.
Verónica Torralba is vice president of strategic marketing for AIG American General. She can be reached at veronica_torralba@aigag.com. Ming Jiang is the director of multicultural marketing development for AIG American General. He can be reached at ming_jiang@aigag.com.
Financial Concerns over premature death |
| Very concerned | Somewhat concerned | Total | | General U.S. population | 28% | 22% | 50% | | All Chinese Americans | 36% | 24% | 60% | |
Percentages speaking Chinese/English |
| At Home | With Friends | With Coworkers | With Neighbors | | Chinese | 79% | 45% | 19% | 13% | | English | 6% | 9% | 58% | 62% | | Both | 15% | 46% | 23% | 25% | |